U.S. saw a surprising hike in existing home sales

Last month, sales of existing homes in the U.S. showed an unexpected increase, reaching its highest level since the beginning of 2021. Such results suggest the market shows a healthy demand, with more buyers benefitting from of stronger job growth and today’s low mortgage rates.

According to the National Association of Realtors (NAR), sales were up by 0.8% from September to an annualized 6.34 million. Meanwhile, a median forecast from a Bloomberg poll of economists was 6.2 million.

Although a monthly pace has slowed down following a 14-year peak seen in 2020, it still exceeds pre-pandemic numbers. Home sales are heading above 6 million this year, and it would be the highest result since 2006.

“Such inflationary pressures, as sharply growing rents and higher consumer prices, could make certain potential buyers lean towards the security of fixed, consistent mortgage payments,” – Lawrence Yun, NAR’s chief economist, noted.

In October, the median home price was up by more than 13% on a year-over-year basis reaching US$353,900, while September showed US$351,200.

There were 1.25 million properties listed for sale last month, marking a 12% annual decline. With this pace, it would take 2.4 months to sell all the properties listed on the market. According to realtors, any number less then 5 months points to tight market conditions.

An average period the properties remained on the market last month was 18 days, while it was 21 days in October 2020. All-cash sales accounted for 24% of all closings.

Sales of existing single-family houses rose by 1.3% to 5.66 million. At the same time, existing condominium sales were down by 2.9% to 680,000.

Midwest and South regions reported sales gains last month: 4.2% and 0.4% respectively.

 

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